Marks & Spencer CEO steps down after poor Christmas for fashion
Marks & Spencer CEO Marc Bolland has stood down from Marks & Spencer after the bellwether retailer posted worse than expected trading figures for Christmas in general merchandise, which includes fashion. The news tops a week of tales of tough Christmas trading at some of the biggest high street players.
Like-for-like sales over Christmas in general merchandise tumbled 5.8%, which was worse that analysts predictions. The retailer blamed unfavourable weather (a warm and wet December deterred customers from buying heavy outerwear and venturing to the high street) and poor availability of some lines, but insisted Bolland's decision to leave was his own.
Chairman Robert Swannell said there had been no shareholder pressure on Bolland to leave, despite intense speculation about his departure in recent months. "The board is very grateful to Marc for his leadership in this important period of enhancing Marks & Spencer's competitive position for its future," he said.
Bolland hands over the CEO reins to Steve Rowe, who has been heading up general merchandise since July last year, having taken that over from John Dixon who left the retailer. Prior to that Rowe was head of food. By contrast to fashion, Marks & Spencer enjoyed its best ever Christmas in food, where like-for-like sales were up 0.4%.
Marks & Spencer is not the only high street retailer to have suffered this Christmas. Next, which is normally a rock solid performer, said full price sales had fallen by 0.5% between 26 October and 24 December while sales at the Next’s catalogue and online business, Directory, rose just 2%. Overall sales were up by 0.4%, which was below analysts' forecasts of around 4%.
Next chairman Lord Wolfson again cited the unseasonable weather as part of the problem buy also admitted increased competition online and availability issues had hit the retailer. It had over-ordered on stock for its twice-yearly Directory and under-ordered on stock from its more frequent in-season drops, he said.
This has led some to speculate that the days of the big book Directory could be numbered as it doesn't suit customers' shopping habits and the continued trend towards fast fashion.
Bucking the trend was John Lewis which posted a 6% rise in its clothing and beauty sales over Christmas. This was largely driven by a strong performance online, with digital sales now accounting for 40% of the group's sales. Analysts, however, speculated that sales at physical stores were likely to have been down around 3% as shoppers shunned stores in favour of online.